The G7 is working on a mechanism to limit the price of oil sold by Russia. In response, the latter may reduce production

Brent    oil price chart at intervals of 1 week

Global oil prices could reach a „stratospheric” $380 a barrel if U.S. and European sanctions force Russia to retaliate and cut production, analysts at JPMorgan Chase & Co. warn.

The G7 countries are developing a sophisticated mechanism to cap the price of Russian oil in an attempt to tighten the screws on Vladimir Putin’s war machine in Ukraine. But given Moscow’s sound financial position, the country can afford to cut its daily crude output by 5 million barrels without undue damage to the economy, JPMorgan analysts including Natasha Kaneva wrote in a note to clients.

For much of the rest of the world, however, the results could be disastrous. Analysts write that a 3 million barrel cut in daily supplies would lift benchmark London oil prices to $190, while a worst-case scenario of 5 million barrels could cost a „stratospheric” $380.